HARARE – The mining sector is seen growing 5,1 percent this year buoyed by positive performance from the gold, platinum, chrome, coal and nickel sectors, Finance minister Patrick Chinamasa said.
Chinamasa on Thursday said the sector — which recorded an overall growth of 8,2 percent contributing 8,7 percent to Gross Domestic Product (GDP) in 2016 — had, however, failed to contribute meaningfully towards the fiscus.
“… however, mention that, notwithstanding the positive growth in mining, and the sector being number one contributor to foreign exchange earnings, its contribution to the fiscus remains low, accounting for a meagre 2,2 percent of total revenues in 2016.
“The finalisation of the Mining Fiscal Regime will therefore address this challenge,” the treasury chief said in his 2016 annual budget review.
He also pointed out that in light of the country’s acute cash shortages, foreign exchange earnings from the sector — which is one of the country’s major foreign currency earners, along with agriculture — were anticipated to ameliorate the situation.
Pointing out that mineral exports had amounted to $2,2 billion in 2016 from $2,1 billion in 2015 driven by platinum and gold earnings, Chinamasa said the sector had managed to offset low international commodity prices.
“This was notwithstanding relatively low international mineral commodity prices. However, enhancement of the viability of mining companies producing gold and platinum benefitted from the review of royalties,” he said.
Output from small-scale miners also improved in 2016 with contribution gradually increasing to reach 42,6 percent of total gold output in 2016, from 36,7 percent prior year.
“This category of miners will also benefit from government support through the SMEs Mining Loan Fund, as well as the recently-launched $20 million SME Facility for artisanal miners,” he said.
Chinamasa said in 2017, on-going reforms in the diamonds and coal industry had begun yielding dividend.
“… these are already seeing the turnaround of these sub-sectors and providing impetus for higher growth in the sector.
“With the capitalisation of the Zimbabwe Consolidated Diamond Company (ZCDC) to the tune of $80 million, diamonds output during the first half of 2017, were 1,1 million carats against 690 000 carats realised during the same period last year,” he said.
According to the minister, coal output has also been on the increase following implementation of turnaround strategies at Hwange Colliery Company Limited.
“Following government capitalisation of Hwange Colliery and appointment of a new board, coal production has jumped from a low of 80 762 metric tonnes per month in 2016 to 170 000 metric tonnes in May 2017 and 234 000 metric tonnes in June 2017 as turnaround strategies began to bear fruit,” he said.